David Popp

The University of Kansas

Department of Economics

213 Summerfield Hall

Lawrence, KS 66045-2113

dpopp@ukans.edu

October 21, 1998

How do the returns to research and development (R&D) evolve over time? I address this question by studying the productivity of energy research during the 1970ís and 1980ís. Patent citation data are used to obtain productivity parameters for 12 different energy technology groups. Evidence of diminishing returns to research is found: the productivity parameters fall over time, and are lower in years with more patents. Furthermore, the productivity estimates are found to coincide with a falling patent-to-R&D ratio in energy fields. Implications for the more general fall in the patent-to-R&D ratio in the U.S. economy as a whole are discussed.